Oversight issues: Consultants
OVERSIGHT ISSUES: CONSULTANTS
1. In the Report of the Board of Auditors (A/AC.96/885), a number of observations and recommendations were made in relation to UNHCR's administration of consultants. Specifically, the report recommended that UNHCR issue guidance to all field offices and requesting units at Headquarters on how to prepare the terms of reference of consultancy contracts in a more precise and output-related manner, and to include objectives, targets and delivery dates with deliverable/measurable outputs. The report also recommended that within its decentralization plans, UNHCR should ensure that a central roster is maintained with up-to-date information.
2. This report details the procedures currently in effect within UNHCR for the engagement of consultants and the actions that have been taken to address the Auditor's concerns.
3. UNHCR's temporary use of individually contracted services of external consultants is governed by two sets of instructions: the United Nations Administrative Instruction (ST/AI/296) of 19 November 1982 and the UNHCR Inter-Office/Field-Office Memorandum (IOM/50/95-FOM/59/95) of 4 December 1995. These documents, which are complementary and set out detailed provisions, guidelines and procedures related to the use of consultants, specify the following criteria:
(i) Consultants are persons whom the Organization requires from time to time to provide outside advisory services or assistance requiring expertise, special skill(s) or knowledge not normally possessed by regular professional staff, that is, not readily available in-house;
(ii) Consultants supplement or enhance available in-house resources temporarily; there is no continuing need for their services;
(iii) Consultants are engaged for services clearly related to priority activities; and
(iv) Consultants should not duplicate work or activities already done or planned by other departments, that is, they should not perform functions of regular staff.
4. The principal procedural and administrative measures governing the use of consultants are:
(i) The need for consultants' services to conform with the criteria outlined in the previous paragraph and, in addition;
(ii) Consultant's services must be for a set period during which the specified activities or functions, or the delivery of a final product, are defined in the consultant's Terms of Reference (TOR) attached to the contract;
(iii) Consultant's costs must be charged exclusively to budgets specifically allocated for the purpose;
(iv) Consultant's services will usually be limited to a maximum of six work months, Exceptionally extendable to nine work months. Contracts normally should be for a shorter period; however, the period must be set realistically so that the objectives are attainable within the set time-frame;
(v) Consultant's remuneration shall be on the basis of the nature of the services and the time required to perform them at an agreed daily, weekly or monthly rate of payment, or a lump sum, representing the assessed value of the services to UNHCR;
(vi) The payment of fees can be made only upon satisfactory completion of specific phases, or the final delivery of the services, according to the evaluation and certification by the head of the unit to which the service was provided; and
(vii) Records of contracts and evaluations of services will be kept centrally, and by the unit to which the service was provided, in the form of a log or roster for the purposes of audit as well as examination prior to the re-hiring of a consultant.
II. ESTABLISHING THE NEED
5. The following sections of this paper will address the points raised in the Board of Auditor's report.
A. Planning Cycle
6. UNHCR's annual planning cycle requires that the Organization's human resources requirements are identified well in advance. There are various staffing options: regular posts (created for over one year), temporary posts (for 12 months or less), temporary assistance (short-term contracts for a few months), secondments, use of implementing partners' staff, emergency response teams, staff on mission and consultants. The staffing of a UNHCR operation is a complex process, often requiring a mix of the above, according to budgetary resources, urgency, availability, in-country resources, expatriate expertise not available in-country and other considerations.
7. Even at an early stage, that is between 12 and 24 months before an activity is due to start, the need for consultancy services may have already been identified because of the nature of the activity, its temporary duration and the absence of available in-house expertise. Based on the verified need for future consultancy services, the annual planning review process establishes specific budgetary allocations for the following year.
8. In some circumstances, UNHCR also resorts to rapidly available consultants to fill in gaps in planned staffing deployments or to meet previously unidentified or under-estimated needs due to the unpredictable nature of refugee situations. These consultancies can be characterized as performing priority activities in the context of emergency deployment of urgently required expertise.
B. Areas in which Consultants are Engaged
9. Annex I provides a breakdown of all consultant contracts issued in 1996 and 1997. The statistics reflect a 10 per cent reduction in the number of contracts issued in 1997 as compared with 1996. In both years, 90 per cent of the contracts issued were for less than six months and an average of 70 per cent of contracts were in the field.
10. Annex 2 compares the consultant contracts issued in 1997 for technical services with the number of substantive UNHCR staff in those areas of expertise. The data provided illustrates that almost two-thirds of 1997 consultant contracts were in technical areas in which in-house capacity is limited. That is, UNHCR resorted to engaging the services of consultants when the required expertise was not readily available or when limited in-house resources needed to be enhanced.
11. Statistically, the average consultant contract is for 80 work-days. Consequently the 295 contracts issued in 1997 for technical services represented some 23,600 work-days or approximately 93 work-years. In those same technical areas, UNHCR employed 34 substantive staff. In other words, on average UNHCR uses consultants for three-quarters of the technical services required to meet programmed needs in the areas of operational support, information dissemination and human resources, due to non-existent, or not readily available, internal capacity.
12. The remaining one-third of consultant contracts issued in 1997 were for services in three areas in which UNHCR has substantive staff in-house:
(i) Information technology;
(ii) Legal/Protection; and
(iii) External relations.
The need for consultants' services in these areas was mainly for the installation of new software or hardware applications, for the production of manuals/publications requiring specific knowledge or presentation skills, and for research to expand or enhance UNHCR's information base in the areas of eligibility, repatriation and refugee law. These consultancies are representative of the temporary use of outside advisory services to supplement often over-stretched internal resources.
C. Enhancement of UNHCR's Technical Capacity
13. During 1997, UNHCR launched the Career Management System (CMS) which has a major training/staff development component. The identification of competencies required for all activities and the regular assessment of whether or not such competencies are being demonstrated by current staff will indicate where training or re-training is required in specialized or technical skills. The absence of competencies among current staff, which requires UNHCR to resort to outside expertise, can be identified and eventually added to those competencies for which training is planned.
14. As part of the change management process outlined by the Director for Change in his report to the tenth meeting of the Standing Committee, UNHCR is reviewing current consultancy arrangements of extended duration and recurring needs. This particularly concerns the area of information technology where more formal commercially-based arrangements (outsourcing) may provide advantages in the longer term for improved dependability and reduced costs.
D. Control Measures
15. The measures introduced by UNHCR in September 1996, as part of a recruitment freeze in the context of planned staff reductions in 1997 and 1998, included prior validation and certification by the Division of Human Resources Management (DHRM) that the consultant's functions could not be performed by available internal resources, particularly by those staff affected by post abolition. This measure has been rigorously enforced by DHRM. Every one of the 400 requests for consultancy services, submitted in the 18-month period since the freeze began, has been examined by DHRM as to the functions, period and cost of the consultant to determine if any available internal staff have the necessary skills, and if their deployment would be cost-effective vis-à-vis the envisaged consultancy costs. This validation is done by Human Resources Officers familiar with internal staff profiles and availability. If no internal staff resources are identified, the consultancy request is submitted to the Deputy High Commissioner or the Director of DHRM for approval.
III. DEFINING THE REQUIREMENT
A. Terms of Reference
16. The terms of reference (TOR) which define the functions to be performed by a consultant are intended to stipulate the services required and a time-frame for their completion. Where the service is an end product - such as a publication, or the installation of computer software or hardware, or the construction of a refugee school - the TOR can be very specific in describing the service in quantitative and qualitative terms, as well as in delineating a delivery timetable. However, many consultancies contracted by UNHCR required the continuous or phased delivery of services over varying periods which may, or may not, be consecutive.
17. Consultants' TORs rarely "stand alone"; usually they are part of a project or initiative which has much broader, and often changeable, parameters. Some examples are:
(a) The construction of a refugee school may be part of a multi-sectoral care and maintenance project for a group of refugees in a remote rural location. A consultant architect may be engaged to design a five classroom school at the same site where a clinic and a community centre are under construction. The specifications for the consultancy may suddenly change due to a new influx, or to repatriation of school-aged children or to the shortage of building materials, or the architect may have to take on the responsibility of on-site supervisor;
(b) New software must be customized for a number of users and a consultant is engaged to install it. However, upon testing the software some users require a hardware enhancement to run the new system. The consultant may be given the additional task of installing the new equipment or re-customizing the software for use on more than one type of computer. The TOR and time-frame may need to be substantially changed;
(c) UNHCR ensures that the competent technical section compiles or reviews the TOR and the consultant is provided with, and is fully aware of, the context in which his/her services are engaged. The various technical units [Programme and Technical Services Section (PTSS); Information and Communications Systems Section (ICSS); Programme Policy Unit (PPU), Field Staff Safety Section (FSSS), et alia] are more often than not the initiator of the consultant's services. As such, they provide not only the TORs, but also all supporting documentation which puts the consultancy in context, as well as continuous technical supervision. This enables UNHCR to take early corrective or remedial actions and the re-orientation, extension or curtailment of a consultancy when circumstances have changed.
IV. SELECTION OF CANDIDATES/MAINTENANCE OF ROSTERS
18. The skills required by consultants in UNHCR are very diverse, ranging from environment specialists and water engineers to legal researchers and computer experts. Thus the responsibility for selection and evaluation of consultants rests with the UNHCR technical unit having the required expertise to assess out those tasks in a professional manner. This is also the case for the hiring of staff in these specialized fields. The best form of evaluation of a consultant is based on his/her prior track record with UNHCR and the assessment of his/her technical abilities. This assessment is given by those in UNHCR having the necessary professional expertise to judge whether a consultant should be rehired.
19. The most prevalent user of outside expertise, the PTSS, keeps a roster of technical consultants which is used in the selection process. DHRM keeps a file on every external consultant used by UNHCR in recent years, including records of all previous consultancies. These files serve as a roster by providing a track record indicating positive past experiences to be taken into account when proposing a consultant for re-hire. Likewise, negative reports would be on file and the re-hire of that consultant would be questioned by DHRM.
20. The proposed decentralization of the administration of consultants within UNHCR is a result of a management study which emphasized that better controls could be exercized by the respective technical section and that economies could be attained by more streamlined procedures.
21. The concern that the proposed decentralization of the administration of consultants could weaken the process will be addressed by ensuring that the technical sections maintain files containing performance records related to previous consultancies. In addition, the computerized roster records which have been maintained by DHRM in the past will continue to be kept on a centralized database. Each major unit using consultants will have access to this database and will be able to access records on previous contracts.
22. DHRM will retain responsibility for two important activities which will ensure compliance with established procedures and the need to regularly review the scope and extent to which UNHCR is using outside contractual services; namely:
(a) Grading consultants on the basis of their qualifications and relevant experience, by establishing an equivalency with the grading requirements for a professional staff member. The remuneration level for consultants will be fixed by DHRM in accordance with this grade and the prevailing United Nations base salary scales for the professional category;
(b) Carrying out periodic reviews of the records maintained by units engaging consultants to ensure compliance with policies and procedures, as well as the maintenance of records and documentation required for audit purposes.
B. Broader Selection Base
23. UNHCR is aware of the need to broaden the basis for hiring consultants. Various parameters prevail, such as:
(i) In the field, where no local consultants with the required expertise are available, an expatriate may have to be engaged;
(ii) When the expertise required is of a very high level of specialization, a known expert with a proven track record providing the best cost/benefit may be engaged; and
(iii) The consultants' gender may be taken into account when there are gender considerations in the nature of the work to be done or as part of UNHCR's gender balance initiatives.
24. UNHCR strives to ensure that as wide a geographic base as possible is used when selecting consultants and that the scope is consistent with nationality representation among UNHCR's international professional staff. What may distort the picture is the fact that many consultants are contracted under an operational project implemented by one of UNHCR's implementing partners, usually an NGO or a local government department, and in some cases, financed by an earmarked contribution. Based on the non-availability of local expertise or the pre-determined availability of an expert from a donor country, the use of expatriate consultants may be both necessary and cost-effective.
25. In 1996 and 1997, 35 per cent of remunerated consultants hired by UNHCR were women. This is consistent with the gender balance among professional staff in UNHCR during the same period. In 1996, the nationalities of consultants comprised 22 industrialized countries and 36 developing countries. Whilst the nationality breakdown in 1997 shows an increase to 42 in the number of developing countries from which consultants originate (see Annex 3), UNHCR will continue its efforts to broaden the basis for hiring while ensuring that availability, quality of services, cost/benefit and timely delivery of services are the principal selection criteria.
C. Recurrent Use
26. UNHCR resorts to the re-hiring of consultants in cases where the outside expertise required is in those technical areas in which UNHCR does not possess sufficient expertise. Thus a consultant with a proven track record, evidenced by previous successful assignments, may be a prime candidate for another consultancy in the same technical discipline, primarily because he/she has a proven ability to meet UNHCR's requirements, standards and time schedules at a reasonable cost.
27. Rehiring the same consultant may also prove necessary due to the originally planned phases in which the services are required and/or the way a project is budgeted. Some examples are:
(a) A project may require a publication or manual as an end product. A first phase would be for the consultant to research the subject matter and submit a draft to UNHCR for review. A break in service could then occur while UNHCR reviews the draft. If UNHCR is satisfied with the material produced by the consultant, that person could be rehired to complete the work through the redrafting, proofing and publication stages;
(b) A technical project in the field may require a feasibility study by a consultant as a first phase. If UNHCR decides to proceed and has the budget resources to implement the project, then the consultant could be rehired to supervise/monitor the implementation stage;
(c) When a new computer system is being introduced, it may require the development or testing of software and the installation of new hardware or related systems. A consultant could be hired to develop the software or test the hardware as a first phase. If UNHCR decides to proceed with the installation, the same consultant may be re-hired to carry out systems or data conversion or customize the software to specific user needs.
D. Evaluation using CMS Competencies
28. The use of functional competencies introduced in the recently launched CMS to identify specific sets of skills could be extended to consultants. This will enable a more thorough analysis of the functions to be performed by consultants against a set of relevant competencies identified prior to the consultant being hired. The selection of a consultant and the subsequent evaluation of a consultant's work would be determined according to this set of competencies.
29. The above points are intended to illustrate the steps being taken by UNHCR to address concerns raised in the Board of Auditors report.
(Note: Tabular annexes not included in this online version. See your nearest UN Depository Library.)